Free Guide To Personal Finance And How To Master Money

Manage your money like a pro

Managing money is a tough task that comes hard to achieve, almost everyone sucks at keeping money, only a few are the pro. Knowing personal finance can change the financial status of anyone within a short period.

it is important to be informed about money so that you can manage your money like a pro.

Some of us used to be a bad money managers because we don’t know everything that goes with finance.

Don’t go broke by keeping your money in the bank (saving account), the best that could happen to your saved money is to be at zero significant increase, do you know why we used Zero because most of the time when banks give you interest on your money they tend to get it back from you through other miss, like SMS monthly charges.

Keeping money in the bank may not be the best options and some investments you think to be best for you to gain extra cash may not be the best for you. A perfect example is to invest in the Forex trade when you are not a pro Forex trader, you are wasting your time and resources, at the end of the day you may end up losing all. 

Some other investments aside from Forex may also be a crap, don’t get lured into them, you must well be informed before you dap into any of these investments.

There are numerous information out there on finance, don’t go nut yet, this article may help you on your finance journey.

We write about this so that you can have more control over your finances, let dig together some strategies and methods that people are using to manage their money and also generate more money into their pockets.

How do you manage your money like a pro with personal finance

First let talk about what personal finance is all about, in a very simple term personal finance is the process and the ability to manage personal money, which includes how much you spend, save, get into debt, and invest.

Many factors determine how you manage your money and there are Age, education, ambition, family, country of residence, all these things have a crucial role in your finance strategy.

This article we are giving you more information on how to create a strategy and follow how you are doing with your financing, most of the time this is normally called personal finance for a reason. Do you know why because you are saving, investing and doing a sort of things for a reason?

In personal financing, we believe you don’t need to look at others, you should be looking at yourself, the reason is simple because we are not on the same status and our finance capability can’t be the same. What works for a 30-year-old boy who is aiming to have some little cut from the stock market, may not work for a mother of 50, close to retirement, this illustration is telling you that the desire and wants of every individual that a given time can’t be the same. 

It doesn’t worth it comparing your financial situation with others, you are in competition with yourself in personal financing. How others are managing their money is insignificant to you.

How to know the phase you belong in the 4 Phases of personal finance

In personal finance, we have four different phases and it is also good to know where you belong among these four phases because each phase requires its unique strategy.

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Phase 1: Starting from the bottom and now to a point 

This is a zero level where all your living are based on a paycheck, without any savings. It is called a zero zone, but the turning point within this phase is when you realized you can’t live on paycheck forever and you start a journey to save.

Save part of your monthly expenses, always try to save more. When you’re at this stage, you are required to only build your financial buffer, all you need here is to keep saving as much as you can to set up a better future for yourself.

Phase 2: Aim higher 

The second phase is known as aim more, this is simply telling us, if we were able to do some savings in the first phase, we can do better by saving up to 30% from our monthly expenses.

The next target is to aim at saving six months of expenses, you must save up to 30%, while you enjoy another part of the money on in this section we just want to build up more of our savings to a reasonable height. 

Phase 3: Get Peace of Mind

In this section, your saving account is getting ready to get some money in it after you have saved at least six months of expenses. You can put it in your saving account and if the money is already been saved in the account from day one, don’t touch it, because the money is put away for a purpose, which is simply for investment.

If you have not saved up to six months, don’t bored thinking of investing, if you are capable to do some investment, slightly go for some wisely investment, this phase is to stabilize you when it comes to finance and start growing your finance to become financially free.

Phase 4: Financial Freedom

Here is the section where everyone prays to get into as fast as possible in our lifetime, when you have financial freedom, money won’t be a problem again because you have enough cash and investments to cover your cost of living.

At this stage you have money to do almost everything you want, going for a vacation, shopping for the family and visiting most of the interesting places in the world would be nothing to you because you have attained the peak.

We all want phase 4 but if you’re in Phase 1–3, you still need to focus on building your penance foundation to get to phase 4.

Why you need 3 different functioning bank accounts as a tool for saving more money?

Having three bank account isn’t bad, it is the best thing to do because you can spread out your money on each one to determine how you spend your money and know what you want to use each one of them for. Let keep it simple this is to have a better view and understanding of your personal finance.

We believe in having 3 bank account because it systemizes your finances and here is how you can use those accounts.

  1. the first account should be your normal checking account

With this account you can place any amount of your choice, nobody can determine this for you as the circumstances surrounding your personal finance is best known to you, but to us, it is better to have less than $700 on this account. 

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This account is meant to cover only your groceries with some other small purchases, the checking account is only meant for small purchase savings.

On this account it becomes difficult to make big purchases, it limits your buying to the small stuff that doesn’t require much money.

2. The second account is the fixed costs account

In this account more money is need when compared to the checking account because it helps you pay for bigger bills, like mortgage and bills for up to six months, it gives you a clear view of the coast you live on, and most time you don’t need to have a bank ATM for the account because you are not making any physical payments with it. 

3. The third account is the savings account

This is an account that needs to be automated, anytime your salary come in, there is an instant automatic monthly deduction from your previous account to your savings account. This makes you save the same amount every month.

When you have done all these things properly, you will be able to spend the remaining amount left in your checking account without affecting your finances. You need to save first before spending what you have left don’t do the opposite. 

What are the 4 Ways to stay out of debt? 

Everyone knows it becomes very impossible to save money while in debt, you need to determine by yourself if you can save money when you’re in debt, how do you want to be paying your debt and which debt should you paying first if it is many.

Having savings even when you are paying debt is better, it helps you have a reserve for other things. Here are 4 steps to do it right to get out of debt.

Related: How to buy a used car in Nigeria and 5 things to know when buying to save money

1. Assess your finance status

If you want to get out of debt you must have a solid goal that determines where you are, and where you are going. A personal finance assessment is needed here, and the best way to assess your financial health is to know what you are earning every month, how much you are spending and what you have left.

If you don’t know the money is coming in, how you spend it, you can’t know how to manage your money. Let your financial status be known to you.

  1. Talk about your interest rates to creditors

Having a concrete deal with creditors will help you pay off debt with less pressure, speak to your creditors asking them to lower how you pay your interest rate, though sometimes this doesn’t work with all creditors, but give it a try if you are going to be lucky. If you can negotiate a lower rate, you will decrease your fixed costs instantly.

Most of the times, creditors never talk to you about negotiating your lower rate put a call to them and be honest about what you want and why.

They can help you lower your interest rate but this depends on the company representative you speak with.

3. Make extra payments

If money is coming your way through other sources aside from your salary or business, it is a great opportunity to make extra payments on your loans, you can start with using the money to pay off other small loans or used it for the bigger one, and all that interest to us is to pay up your debts.

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4. Live on a budget for a specific period

When you are in debt, it becomes necessary to reduce how you spend and make a budget for everything to spend on. A temporary budget is necessary if your debts are overwhelming and you must get used to them for some time.

Set a budget and stick to it, it is just for a short period, you can bounce back to normalcy when you’re financial situation looks better.

Once you’re out of debt, stay away from it, especially debts that are huge in sum, like credit card debt, personal loans, car payments, or any type of payment plan for consumer goods.

Avoid taking on debt for purchasing anything that does not increase in value over time.

When a Debt is not for finance income-generating assets, it becomes a liability, some of the best things you can have debt for value is borrowing money to pay for a school fee, loan for a business, these are value-driven, don’t be in debt because you want to look good or you want to buy trending clothes, a mortgage to buy a home that is not generating any profit, and you can’t always count on appreciation in value, all these are not a wise decision enough to go on a debt.

Why you need to make more money

The world we are in right now has gone beyond having just one stream of income, don’t rely on a stream, it is too dangerous. Having multiple streams of income streams make you become a better person. 

To keep on live, it is better to explore different ways you can generate extra income from. Here are a few ideas we have for you

Start a blog, Youtube channels, eCommerce website where you can sell stuff, create a digital course on something you know, Build an app, there are other options to explore we only mentioned a few here.

Invest Your Money is a wise decision in personal financing

Investing is about creating long-term wealth for yourself and this is what you have to do completely to obeying all the steps that come with personal financing. It’s an essential part of your strategy.

Once you are out of debt, investing would be the next thing you should be looking at to manage your money and generate more for yourself. You can invest in real estate, stocks and other good investments opportunity that comes your way, remember always make a wise decision when you are investing.  

Be the pro managing your finance

Personal finance is all about the life you want for yourself and living according to your plan for a better tomorrow, if you can manage everything right you are a pro personal finance manager because you were able to create the life you want for yourself and the family.

Nothing feels better to us than to become a pro personal finance manager and this is when you can manage your finances right that is why we have taken out time to break down the steps and things you can face in personal finance to guide you towards becoming your boss money. We believe this guide is helping someone out there.

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